What is the bond registration process?

When purchasing a home a purchaser may be in a position where they may need to borrow money from a bank to make up the balance of the purchase price. When doing so it is crucial that the purchaser understands the steps in the bond registration process, as well as who is involved.

Who is involved in the bond registration process?

• the seller
• an estate agent
• the buyer
• a transferring attorney (appointed by the seller to transfer the property to the buyer's name)
• a bond attorney (appointed by the bank receiving the bond)
• a cancellation attorney (appointed by the bank cancelling the seller's bond)

Note: The same attorney could deal with more than one or all of the above transactions.

How do I go about registering a bond?

Step 1:

• Buying a property
• The buyer and the seller sign an offer to purchase.
• The buyer applies for a home loan from us.

Step 2:

• Bond approval
• We approve the home loan and request the bond attorney to register a continuing covering mortgage bond.

Step 3:

• Property transfer
• The seller advises the transferring attorney to transfer the property.
• The title deed and cancellation figures are requested from the bank which holds a bond over the property.
• A statement of rates and taxes is requested from the local authority.

Step 4:

• Bond attorney contacts transferring attorney
• The bond attorney advises the transferring attorney of the amount available for guarantees, and requests the draft deed of transfer and the guarantee requirements.

Step 5:

• Cancellation attorney
• The cancellation attorney is requested to cancel the seller's bond on receipt of a guarantee for the amount owing.

Step 6:

• Transferring attorney
• The transferring attorney receives the title deed and cancellation figures, and sends a copy of the deed of transfer and the guarantee requirements to the bond attorney.
• The transferring attorney asks the buyer and seller to sign the transfer documents.
• The buyer pays the transfer costs and the transferring attorney then pays the rates and taxes and transfer duty.

Step 7:

• Bond attorney
• The bond attorney prepares the bond documentation together with the buyer.
• The buyer signs the documents and pays the costs.
• The bond attorney prepares and issues the necessary guarantees, forwards them to the transferring attorney, and prepares the bond documents for lodging at the Deeds Office.

Step 8:

• Transferring attorney
• Once the transferring attorney has received the guarantees, they are forwarded to the cancellation attorney.

Step 9:

• Cancellation attorney
• The cancellation attorney obtains a consent for cancellation from the bank that holds the seller's bond.

Step 10:

• Documents prepared for the Deeds Office
• After all the documents have been signed and the costs paid, the transfer, new bond and cancellation bond documents are prepared by the respective attorneys for lodging with the Deeds Office.

Step 11:

• Deeds Office
• All the documents are lodged simultaneously at the Deeds Office by arrangement with all the attorneys concerned.
• The Deeds Office takes about two to three weeks to check the documents before they are ready for registration by all the attorneys on the same day.

Step 12:

• Bank pays loan
• On the day of registration, we pay out in accordance with the guarantees issued.

Allow at least three months for the registration and transfer of the bond.

What could delay the registration of a bond?

Delays could be caused by:

• failure by the seller and/or buyer to provide personal information
• failure by the seller to provide details of the bank holding the existing bond
• the existing bondholder not providing cancellation figures and title deeds to the transferring attorney
• receiving rates figures from the local authority and/or clearance certificates
• failure by the buyer to pay a deposit (if required)
• delay in the provision of guarantees
• failure by the buyer to pay transfer and/or bond costs on time
• the seller delays the signing of transfer documents
• the buyer delays obtaining government capital subsidy approval or employee income subsidy documents for new bondholders, and a failure to comply with other bank requirements
• the buyer delays signing the transfer and/or bond documents

Acutts Estate Agents are one of only 2 real estate agencies in South Africa who have their own in-house Mortgage Division just waiting to help you with your application. Please e-mail bonds@acutts.co.za for more info.

Ref: John Goldstone (KZN and EC Regional Manager, Mortgage Max)